The Economic Outlook
Remarks at Foreign Policy Association, New York City.
The Economy in the Time of Coronavirus
Remarks at the Buffalo Niagara Partnership, the Greater Rochester Chamber of Commerce, and CenterState CEO (delivered via videoconference).
Welcoming Remarks: Thirteenth Annual International Banking Conference
Welcoming remarks delivered by Charles Evans before the Thirteenth Annual International Banking Conference on September 23, 2010, in Chicago, IL.
Cash-in-the-Market Pricing in a Model with Money and Over-the-Counter Financial Markets
Entrepreneurs need cash to finance their real investments. Since cash is costly to hold, entrepreneurs will underinvest. If entrepreneurs can access financial markets prior to learning about an investment opportunity, they can sell some of their less liquid assets for cash and, as a result, invest at a higher level. When financial markets are over-the-counter, the price that the entrepreneur receives for the assets that he sells depends on the amount of liquidity (cash) that is in the OTC market: Greater levels of liquidity lead to higher asset prices. Since asset prices are linked to ...
Gambling for Dollars: Strategic Hedge Fund Manager Investment
Hedge fund managers differ in ability and investors want to distinguish good ones from bad. Via the design of their investment strategies, better fund managers want to ease this inference problem while worse fund managers want to complicate it. We impose only the minimal restrictions on the nature the investment strategies that, on average, returns reflect the hedge fund manager?s ability and that returns be bounded from below, and solve for the set of equilibria that emerge. We then show that under a variety of equilibrium refinements, a unique equilibrium obtains. In this equilibrium, ...
The Concentration of Cleared Derivatives: Can Access to Direct CCP Clearing for End-Users Address the Challenge?
Cleared derivatives contracts are now concentrated among a small and dwindling number of institutions. Many policymakers and regulators have argued that this concentration has adverse consequences, some of which may have systemic risk implications. The authors explore the benefits and challenges of encouraging major end-users of derivatives to become direct clearing members of central counterparties (CCPs). If done prudently, increasing and diversifying the pool of clearing members and redistributing outstanding derivatives contracts across them may help CCPs become more resilient.
The Federal Reserve's Tools for Policy Normalization in a Preferred Habitat Model of Financial Markets
This paper develops a model of the financial system that provides a framework for analyzing monetary policy implementation in a world with multiple Federal Reserve liabilities and a superabundant supply of reserves. The analysis demonstrates that the Federal Reserve's suite of policy tools including interest on excess reserves (IOER), overnight and term reverse repurchase agreements, and term deposits should allow the Federal Reserve to raise the level of short-term interest rates at the appropriate time. The model also demonstrates that these tools could be used in different ways to achieve ...
Weighing the risks to the economic outlook: remarks at The Leo J. Meehan School of Business, Stonehill College, Easton, Massachusetts, September 3, 2019
It was an eventful August in the financial markets amid talk of additional tariffs and tax cuts, the falling 10-year Treasury rate, and volatility in stock prices. But the economic data and forecasts indicate a relatively good domestic economy.
Introducing the Chicago Fed’s New Adjusted National Financial Conditions Index
This article introduces improvements to the adjusted National Financial Conditions Index (ANFCI). Compared with the previous version, the new ANFCI uses an enhanced estimation procedure with a broader set of macroeconomic adjustment variables and produces a longer time series history.